ASIDIC Spring 2007 Meeting

GETTING MONETIZATION RIGHT: BLENDING MODELS FOR ONLINE AND THE ENTERPRISE

Patrick Spain pjspain@highbeam.com

And Now a Word from the Other Side…

I want to say those words again for everyone within the sound of my voice to hear and to heed, and especially for you, Mr. Leonsis: From my cold dead hands!

HighBeam Research, Inc• HighBeam.com

– Paid online service with 45 million premium articles from 3000+ magazine, newspaper & newswire sources

– $100/year or $30/month– Serves individuals, primarily consultants, small

business, writers, and some academics

• Encyclopedia.com– 250K reference articles from Columbia, Oxford,

Britannica & others– Accompanied by 4 million free articles from several

hundred magazines, newspapers, newswires, etc.– Free-to-the-user advertiser supported model– Provides an introduction to HighBeam.com– Serves the millions looking for a quick answer –

competitive advantage is articles allow deeper entry

HighBeam.com Home Page

HighBeam.com Search Results Page mid-2006

HighBeam.com Current Search Results

HighBeam.com Preview Page

Encyclopedia.com Home Page

Encyclopedia.com Results Page

Encyclopedia.com Article Page

Encyclopedia.com Bottom of Article Page

Encyclopedia.com Way Bottom of Article Page

Learnings

• Mixing free & paid content is very tricky & potentially confusing

• Using free content to promote & get paid content articles indexed is working well

• Ads on paid content are not a problem, though there is always balancing to do when you are using it to acquire customers

• Users prefer free content but not yet, in our case, to the point where we make the same from free as paid content

Final Thoughts: I suspect that Ted is right:

• Online advertising in 2006 was $16.8 billion, up 34% from 2005, according to IAB

• Online advertising will be an $80 billion business in 2011, according to Piper Jaffray

• The last data on online paid content was OPA’s 2005 report - $2 billion, up 15% from 2004, the increase driven largely by iTunes

• So….

Follow HighBeam’s Motto

One Man’s Theory of Blending….